Three ministries jointly promote E20, E85 useBANGKOK, May 17 (TNA) - In an attempt to promote the use of ethanol among the Thai public, three ministries will cooperate in using E20 or E85 in their vehicles, Deputy Minister of Agricultural Cooperatives Theerachai Saenkaew said Saturday.

Mr. Theerachai said his ministry with the energy and industry ministries planned to use E20 or E85 in official vehicles to encourage the use of ethanol in Thailand.

It is also hoped that the high profile application of E20 or E85 would bolster confidence among auto buyers, inducing them to import more ethanol-adapted cars into Thailand, eventually leading to the full use of ethanol E100 in future, enabling Thailand to depend less on imported crude oil as planned by the government, Mr. Theerachai said.

E20 contains 20 per cent of ethanol and 80 per cent gasoline while E85 is an alcohol-based fuel typically containing up to 85 per cent denatured fuel ethanol and gasoline or other hydrocarbon by volume. On an undenatured basis, the ethanol component ranges from 70 to 83 per cent.

Currently, there are 48 ethanol producing plants in Thailand but their production has not yet reached full capacity, and some operators are also reluctant to invest more, said Mr. Theerachai.

Production costs of ethanol run as high as Bt19 a litre while it is sold at around Bt16-17, he said, adding that both producers and consumers are unwilling to use ethanol due to its priciness. (TNA)-E111

You're right the production cost of a litre petrol seems to be ca $0,80 today.

In that case petrol is still cheaper to produce,

1 kWh petrol is then $0,08 and
1 kWh thai-ethanol would be ca $0,090

On the other hand do flexifuel cars run more energy efficient (ca 5%) on ethanol, even if they are not optimized for ethanol. Whe they are optimized the efficiency will get even better. So from that point of view the Thai ethanol can already compete with imported oil and as oilprices rise further the advance for ethanol will only increase.

Apart from that, locally produced fuel must be much better for the Thailands economy than inmported fuel, so some kind of tax cut on ethanol will not harm the economy either.

Thailand will introduce E85 gasohol in the third quarter of this year, a full three years ahead of earlier plans, Finance Minister Surapong Suebwonglee declared yesterday. Authorities yesterday also told local oil refineries they must accept lower margins on diesel fuel in order to help finance a new stabilisation fund.

The announcements came in light of continuing gains in world oil prices, which topped $135 a barrel earlier this week but were trading around $132 in London markets yesterday.

Ethanol production, mostly from molasses and cassava, has jumped as authorities look to reduce the country's dependence on imported crude oil.

E85 is a blend of 85% ethanol and 15% premium petrol. E10, containing 10% ethanol, is already widely used in the local market. Authorities introduced E20 this year as local automakers began to offer E20-compatible cars.

It is not clear whether the country could produce enough ethanol to meet demand for E85 fuel.

''Accelerating the rollout of E85 ... is one of a package of new measures that we will adopt to help address the energy crisis,'' Dr Surapong said.

He said economic ministers would review details of the new energy package on Monday.

''E85 will help reduce fuel costs for consumers. Pump prices will be cheaper than standard petrol by as much as 10 baht per litre,'' he said.

Dr Surapong said world automakers already had developed E85-compatible engines overseas, and they could be imported into the country for local use. Carmakers with domestic production facilities could also open new lines to produce E85-compatible cars.

''We need to create new options for the public in using fuel, whether it be NGV (natural gas for vehicles), LPG (liquefied petroleum gas) or gasohol,'' Dr Surapong said.

Currently only Volvo offers E85- compatible cars in the local market, with its C30 sedan launched last year.

Thailand will reduce taxes on ethanol-based fuel and cars that run on it, in a bid to cut the nation's costly oil imports, officials said Tuesday.The Thai cabinet agreed to slash the tax on so-called E85 gasohol, an 85 percent ethanol-blended gasoline, from 3.6850 baht a litre to 2.5795 baht -- a 30 percent reduction, energy minister Poonpirom Liptapanlop told reporters.Small cars that run on E85 will be taxed at 25 percent, down from a minimum of 30 percent, he said. Larger cars will be taxed at a higher rate, he added.

Automakers will receive a three-year import tax holiday on foreign autoparts needed to produce the E85 cars here, if the parts cannot be produced locally, said Pannee Sathavarodom, head of fiscal policy for the finance ministry.

Sugar millers have welcomed the government's policies to introduce E85 gasohol this year as an important step in the development of the country's fledgling ethanol industry. E85, a blend of 85% ethanol and 15% petrol, is expected to be introduced in the third quarter, and follows the launch of E20 at the beginning of the year.

Chalush Chinthammit, an assistant vice-president at Khon Kaen Sugar Industry, said higher demand for ethanol would help support the sugarcane industry.

"There is oversupply now in the ethanol market. ... If we can create local demand for sugarcane and add value to the industry, prices will rise and the government will not have to bear the cost of price supports," he said.

''I only hope that the government is serious in pushing for E85. If we have E85 cars in Thailand, car owners will save money on fuel while cane farmers benefit from higher prices. It's a win-win situation,'' he said.

Local ethanol production, based on cassava and molasses, is currently estimated at 800,000 litres per day compared with production capacity of 1.58 million from 11 producers.

Production capacity is projected to reach 4.4 million litres per day by the end of the year once all 44 licensed producers begin operations.

But while ethanol producers are ready to go with E85, auto manufacturers say it may not be until late 2009 or 2010 that E85-compatible cars are produced locally.

Adisak Rohitasune, a senior vice-president for Asian Honda Motor, said it would take at least one year to develop E85 technology that was suitable for the Thai market and climate.

''It's just not economical for the company to import completely built-up cars, so we will have to wait until adaptations to the technology are complete,'' he said.

Mr Adisak said, however, that car owners should be aware that gasohol is less efficient than an equivalent volume of petrol. One litre of ethanol may be sufficient to run seven kilometres, he said, compared with 10 km for a litre of petrol.

But with E85 prices expected to be up to 12 baht per litre cheaper than petrol, motorists should still see some financial savings from the new fuel.